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NEW DELHI: Realty major DLF Tuesday reported a 76 per cent jump in its consolidated net profit at Rs 436.56 crore for the quarter ended March on higher sales. Its net profit stood at Rs 247.73 crore in the year ago period, the company said in a regulatory filing.
Total income rose to Rs 2,660.95 crore in the fourth quarter of 2018-19 fiscal from Rs 1,845.92 crore in the corresponding period of the previous year.
During the full 2018-19 fiscal, net profit declined to Rs 1,319.22 crore from Rs 4,463.86 crore in the previous financial year. The drop in profit was because of exceptional gain from sale of rental business in the 2017-18 fiscal.
However, total income rose to Rs 9,029.41 crore in the last fiscal from Rs 7,663.71 crore in the 2017-18 fiscal.
Sources: realty.economictimes.indiatimes.com

State-owned NBCC is unlikely to dilute certain conditions, including exemption from tax liability, in its offer for debt-laden Jaypee Infratech but is ready to negotiate on the proposal related to unsold flats, sources said.
Jaypee Infratech's lenders have started negotiations with NBCC on the latter's bid to acquire the realty firm.
Last week, the National Company Law Appellate Tribunal (NCLAT) had annulled voting by homebuyers and lenders on NBCC's bid and allowed renegotiation on the offer by May 30. Voting process could start from May 31.
According to sources, lenders have shown reluctance to acquire up to 2,207 unsold flats worth Rs 1,756 crore as proposed by NBCC in its revised offer.
NBCC is ready to negotiate on its proposal related to unsold flats, they added.
However, sources said NBCC is unlikely to dilute its conditions related to exemption of tax liabilities.
In its revised offer, NBCC proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.
Last week, the Committee of Creditors (CoC) decided to put on vote the revised offer of NBCC, with homebuyers favouring the voting process while bankers dissenting.
Lenders had written to the NBCC seeking clarifications on certain concessions sought by the public sector firm in its resolution plan.
However, NBCC decided not to dilute the conditions of exemption from income tax liability as well as from taking consent of development authorities for transfer of businesses.
Clarifications from the NBCC were sought in the wake of the Interim Resolution Professional (IRP) flagging to the lenders that NBCC's bid was conditional and non-binding.
The IRP Anuj Jain had written to the CoC that NBCC's revised bid was conditional as the plan would not be binding unless key relief measures such as extinguishing of income tax liability and exemption from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer, were taken.
Jaypee Infratech went into insolvency process in 2017 after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium seeking resolution of the realty firm.
In the first round of insolvency proceedings, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
Later in October 2018, the IRP started the second round of bidding process to revive Jaypee Infratech on the direction of NCLT.
Earlier this month, creditors, including banks and homebuyers, rejected a bid by Mumbai-based Suraksha Realty through a voting process, following which the CoC decided to consider NBCC's offer.
Sources: realty.economictimes.indiatimes.com

CHANDIGARH: A three-member committee, headed by a retired judge of the high court, will examine all aspects of the multiple plot allotment scam in which residential plots in the Haryana government’s developed sectors across state were allotted on the basis of forged affidavits. The committee will start functioning from June 1.
The committee is expected to examine allotment of around three lakh plots, which were allotted by the HUDA in the last several years, according to sources.
The committee will have Justice Rameshwar Singh Malik, a retired judge of the Punjab and Haryana high court as its chairman. Retired district and sessions judge G S Saran and retired IPS officer S S Sidhu are the other members of this committee.
“With the consensus of the parties through their counsel, it would be in the interest of justice to constitute a committee consisting of three members, headed by a retired HC judge, to ascertain the details of the plots ie name of the allottee, father’s/husband’s name and address, plot number, sector, urban estate, size of the plot, category, date of allotment, policy applicable, any other allotment of plot/flat by the cooperative society, filing of affidavits, allotment in the name of spouse or dependent children, registration of FIR or not, status of the proceedings, etc,” according to the order passed by Justice Daya Chaudhary.
In the recently-released order, Justice Chaudhary clarified that the committee shall examine the allotment of plots in different categories, including Scheduled Castes/Scheduled Tribes, Backward Class, war widows / disabled soldiers, widows (other than war widows), freedom fighters, their children & grandchildren, handicapped /blind (1% each), Haryana government employees, defence personnel / ex-servicemen, paramilitary forces like CRPF, BSF, ITBP, RPF, GSF, legal heirs/dependents of the police personnel killed in action, advocates discretionary quota and EWS quota.
The Haryana government and the HUDA (now Haryana Sahari Vikas Pradhikaran) have been directed to share complete record with the committee. Two advocates, H S Sethi and Narender Singh would also assist the committee.
The high court has set a three-month deadline for the committee to complete the whole exercise. However, the committee would be at liberty to move an application for extension, if required.
The scam
Irregularities in allotment of Haryana Urban Development Authority (HUDA) plots surfaced in 2013, when the high court had ordered a probe in the matter after finding that a large number of defence personnel in Haryana were getting plots in HUDA sectors by submitting forged affidavits.
They were entitled to get one plot under defence category at subsidized rates in their lifetime but most of them had managed to get from 2 to 25 plots by submitting false affidavits and concealing previous allotments. Around 1,600 FIRs have been registered by the Haryana police in the scam and more than 2,100 persons have been booked and are facing charges.
No consensus on compounding policy
During the hearing of the case, the Haryana government came up with a draft policy of compounding the offence by deposit of reasonable amount but some of the allottees did not agree to pay the compounding fee as the price of the plots was low at the time of allotment and it had shot up now.
Sources: realty.economictimes.indiatimes.com

NEW DELHI: Should you invest in commercial or residential properties? Both commercial and residential properties have their pros and cons. Commercial properties are a little higher in cost as compared to residential properties but they yield higher rental returns. On the other hand, residential properties are bought primarily for end-use as well as long-term investment. So, should one buy a residential property or a commercial one?
“Commercial real estate has been gradually growing in terms of demand with supply just about keeping up; so price points have steadily moved upwards. Presently, growth in capital and rental values of commercial real estate is on a growth curve. Residential real estate has remained largely stagnant since the past few years – caused by the impact of regulatory changes,” says Niranjan Hiranandani, national president, NAREDCO.
Returns on Investment (ROI)
Residential properties are mostly bought for self-use. However, one can also generate income from residential property by leasing it out. Price appreciation of residential properties over a period of time is another factor that attracts investors.
Properties which can create steady income are typically office spaces, warehouses, retail, industrial and institutional real estate. Regular rent is a key factor that makes investors buy commercial property and price appreciation also remains high.
“Commercial properties are good investment opportunities to earn regular income as they offer high rental rates compared to residential properties. While residential properties, during an economic downturn, are much better than commercial properties, said Ravindra Pai, managing director, Century Real Estate.
However, rental income and price appreciation depends on many factors such as current market trends, location, social and physical infrastructure. These are deciding factors for both commercial and residential property to appreciate.
“The residential market has now begun to pick up, although it will take some time for price appreciation to happen. Whereas in commercial real estate, Grade A office properties have been yielding higher returns. The estimated overall return in residential properties is around 3-4% per year and for commercial properties it is 8-10%,” adds Pai.
Arrival of REITS
India witnessed the launch of its first Real Estate Investment Trust (REIT) by Blackstone and Embassy Group in March 2019. The success of this event led to fresh investment avenue for the country’s commercial real estate sector. It also gave retail investors an opportunity to invest in commercial properties.
JLL research indicates that 294 million sq ft (REITable asset from stock as on 2018 and includes Embassy Office Parks REIT) of office space stock would be eligible for REITs. This would translate to a potential investment of $35billion. This is certainly a big opportunity for Indian investors.
Growth of commercial real estate
Office properties in the right location and project attract quality corporate tenants and can, therefore, yield good rental returns over prolonged periods.
“The average rental yield of a commercial property falls in the range of 6%-10%, whereas the rental yield of a residential property is low in the range of 1.5% - 3.5%. Simultaneously, capital appreciation can also be more than satisfactory for the right office assets,” explains Anuj Puri, chairman, ANAROCK Property Consultants.
Due diligence
While investment is an opportunity it has its own set of risk involved. Hence, one needs to take a calculated step and perform due diligence before investing. You need to check the builder’s track record, location, past price trends, connectivity, job opportunities etc before investing in a commercial or residential property. Also, one needs to ensure that a property is RERA registered in case of an under-construction project.
Key markets
Some of the key markets for investing in both commercial and residential markets are Bengaluru, National Capital Region (NCR) and Mumbai Metropolitan Region (MMR). Growing job opportunities and multi-national companies taking up big land parcels in Indian cities are propelling growth of the commercial sector, not just in metros but tier 1, 2 and 3 cities. Residential market is also witnessing demand from buyers where connectivity is good and job hubs are located nearby.
“Traditionally, top metros including Delhi, Mumbai and Bengaluru, have been the favorite destinations for investors, a trend which has been apparent in the past decade. Metro cities, along with neighbouring areas have collectively ended up getting three-fourths of real estate investments over the past few years,” adds Hiranandani.
Investors must compare their options and price trends before investing either in commercial or residential property. A due diligence is a must with regard to price, location and property prospects before buying.
Sources: realty.economictimes.indiatimes.com

GURUGRAM: The department of town and country planning (DTCP) has cancelled occupation certificates issued to 38 residential properties in DLF areas and Sushant Lok 1 for violating building norms.
According to DTCP, these properties were running commercial activities in residential buildings, causing loss of revenue for the state exchequer to the tune of several crores of rupees every year.
As per rules, commercial activities are not allowed in residential areas, be it licensed colonies that come under DTCP or plots in sectors falling under Haryana Shahari Vikas Pradhikaran (HSVP).
District town planner (planning) RS Batth told TOI that out of the 38 properties, 30 are situated on Golf Course Road and in DLF area while the remaining are in three blocks of Sushant Lok 1.
“The action was taken after completing the due process. A team of junior engineers visited the properties and noted the violations, after which the OCs were cancelled. The DTCP director, during his visit to Gurgaon last week, issued strict instructions to check illegal commercial activities and take action against such violators,” Batth said, adding that the department is writing to the district administration so that these properties are not registered at the tehsil level.
DTCP director KM Pandurang said, “We will continue with action against such illegal constructions and violations.”
TOI had earlier reported that more than 100 residential buildings, after procuring occupation certificates from the government, had made changes in the structures to start commercial activities, including gym, salon, showrooms, clinics, educational institutions and others.
Sources: realty.economictimes.indiatimes.com

GURUGRAM: Launched in 2012, the Ansals Highland Park project in Sector 103 has seen no construction work taking place in the last six months. More than 600 homebuyers are bearing the brunt now.
The buyers claimed that even though they had paid 90% of the total amount, the construction is only 45-45% complete. The builder had promised to complete the project in 2017.
Despite several attempts, TOI could not reach the developer for a comment.
Vipin Khanna, a homebuyer, said the work at the site has seen no progress in the last six months. When a group of homebuyers visited the site recently, they found a few labourers doing odd jobs. “When we visited the site on May 2, we noticed that the work had remained at the same level as it was six months back. Labourers were found doing odd jobs, while there was no engineer or officials present in the site,” Khanna said.
He added that after they visited the site, they realised that the developer had wasted their hard-earned money. “There is no update on the developer’s licence renewal as DTCP website shows it expired in 2016. Moreover, the Ansals are not giving us any positive reply,” he said.
Another buyer Navnit Tyagi said, “On seeing the non-responsive attitude of Ansals, the hombuyers’ association filed a case in HRera, Gurgaon. The first hearing will take place in July.”
“We have spent our savings for our dream home. We now hope that Rera will do justice. Most of us are paying our rent and EMI at the same time. We just want the developer to complete the project and rid us of this extra financial burden as soon as possible,” he added.
A group of homebuyers said that they had filed an RTI to know the reason for the delay in licence renewal but have not received a reply yet.
When the construction activity at the project site did not resume for months, the buyers organized several meetings with officials of Ansal to inquire the reason for the work being at stan-dstill and also about the details of the funds collected by them.
The developer informed them that they don’t have funds to carry out construction work. “As a matter of fact, the developers have also diverted the amount paid by the buyers for this project to other projects,” said Sanjay Verma, president of buyers association.
Pooja Jha, also a homebuyer, says apart from paying EMIs on housing loan as well rental, there is additional burden on them as they are paying fee for legal battle against the developer. “It is really painful as all of us are already under tremendous financial burden due to callous attitude of developer. There is no hope of getting justice and our dream homes in near future,” she said.
Sources: realty.economictimes.indiatimes.com

GURUGRAM: The ‘Violation’ mobile application, developed by MCG, has received around 830 complaints alleging illegal construction and encroachments in the past three months.
While 570 complaints were recorded on the app in February, another 172 and 88 complaints were received in March and April, respectively.
According to an MCG official, the app was launched in an attempt to digitise the enforcement operations of the corporation, and now all the processes related to the enforcement wing are carried out online.
“The app has helped us bring in transparency and accountability in handling encroachment and unauthorised construction complaints. At the same time it has also made it easier to maintain a record of all such activities in the city,” said MCG commissioner Yashpal Yadav.
Yadav added that every junior engineer in the wing has the app installed on their phones and when they receive the complaint on the app, they have to attend to it and update the status on the ground. “They need to be within a specified perimeter of the spot mentioned in the complaint in order to upload the details,” said Yadav.
The app was developed by the in-house GIS lab in order to ensure that the data cannot be misused by anyone outside the department. The app has a feature that sends a sealing notice to the defaulter automatically once a complaint gets registered. Illegal constructions and encroachments are rampant in the city and MCG has drawn flak for not being able to contain the menace despite regular sealing and demolition drives.
Between April 2018 and February 2019, the MCG has issued 846 notices for encroachments. Additionally, 389 demolition orders were passed during this time with 156 sealing drives and 141 demolitions.
Sources: realty.economictimes.indiatimes.com

GURUGRAM: Owners of hundreds of flats in residential societies and commercial spaces in malls have filed a series of complaints against the district registrar of firms and societies, I S Yadav, with the additional chief secretary (ACS) of the industry and commerce department, Devender Singh, seeking a probe into corruption charges against the former.
The complainants are mostly owners in Westend Heights, Ridgewood Estate, CHD Avenue 71 and Central Plaza Mall.
Shop owners of Central Plaza Mall in Sector 53 complain of misappropriation of mall association’s fund by the current governing body, which has gone unchecked by the district registrar. Yogesh Saini, owner of a shop in Central Plaza Mall, said Yadav did not obey the 2017 order by the state registrar’s office for Yadav to audit accounts of the shop owner’s association, following complaints by shop owners, which he did not obey.
Saini alleged several crores of rupees of the association’s funds were misappropriated because Yadav failed to take action.
A resident of Westend Heights, Ritu Bhariok, said representatives of five residential societies, including herself, had met ACS Devender Singh in Chandigarh to discuss their grievances and to demand action. Bhariok alleged the Westend Heights RWA has been concealing the society’s key financial records and documents, which every property owner and member is entitled to review and receive.
“Despite clear directions and multiple orders by the state registrar of societies over the past two years, Yadav has been ignoring the wrongdoings and avoiding compliance of directions by his senior officials, causing harassment to residents,” said Bhariok.
Ritu Bagai, another Ridgewood Estate resident, said following RWA elections, residents lodged complaints against Yadav for arbitrarily approving the governing body, in violation of Haryana Registration and Regulation of Societies (HRRS) Act 2012, but no action was taken. She added residents are hopeful the ACS will take action against Yadav.
Gaurav Kalra, resident of CHD Avenue 71, said, “We’d first reported financial irregularity and other violations by the RWA to the district registrar on April 2 2018, but our complaint is still lying unresolved.” He added even after repeated requests, Yadav has purposely delayed hearings/proceedings in the name of natural justice, thus extending time allowed to the governing body, which the latter has used to further misappropriate public funds and manipulate/tamper records. He wrote that although the district registrar’s inaction was brought to the state registrar’s notice, no relief has been offered till date.
When contacted, I S Yadav said, “Residents can raise their grievances but many of the complaints were filed to put pressure on me. Issues raised by residents are being looked into as per HRRS Act 2012 norms,” adding most complaints about RWA elections etc have already been resolved, only a few are still being processed.
Sources: realty.economictimes.indiatimes.com

NEW DELHI: The government has decided to back homebuyers caught in insolvency cases and told the National Company Law Tribunal (NCLT) that the majority vote of homebuyers cast in favour of a resolution should be treated as “the voting preference of whole sub-class in Committee of Creditors (CoC)”.
In its affidavit before the tribunal, the ministry of corporate affairs (MCA) has said, “…considering the recommendation of Insolvency Law Committee (ILC) and larger public interest for actualising of the preamble of the Insolvency and Bankruptcy Code (IBC), viz, an outcome-based approach, which would facilitate resolution of Jaypee Infratech Limited (JIL) over liquidation, may be adopted.”
It went on to say that homebuyers should be treated as a sub-class within the ambit of the financial creditor.
Several resolutions, including the appointment of a resolution professional for Jaypee Infratech, have been hit as the mandated 66% vote has not been met. This had prompted homebuyers to seek an interpretation of the law by the NCLT.
In a similar case involving AMR Infrastructure, the NCLT had used the principle of ‘first past the post’ and recommended that once the majority threshold is crossed, it should be treated as the voting preference of the whole sub-class in CoC.
However, in AMR Infra, only buyers were the creditors. Therefore, it could not be applied in the Jaypee Infratech case, where banks and financial institutions are also creditors.
In case of AMR Infra, the principal bench of NCLTDelhi said in case of real estate (commercial & residential) comprising 100% voting share in CoC, a resolution would be deemed to be passed if it is voted by highest number of financial creditors in the class of real estate (commercial & residential).
In its affidavit, the MCA cited the AMR case and said, “Following the principle of ‘first past the post’, it was recommended that once the majority threshold is crossed, it should be treated as the voting preference of whole subclass in CoC.”
A new proposal on NBCC’s resolution plan is currently under voting, and with banks unlikely to back it in its present form, the move is expected to be defeated.
Sources: realty.economictimes.indiatimes.com

NEW DELHI: Home buyers will have to pay 12 per cent GST on balance amount due to the builder if the housing project has been granted completion certificate by March 31, 2019, the CBIC has said.
Builders who have received completion certificate for an ongoing project before April 1, 2019, will have to charge 12 per cent GST from buyers on the balance amount due towards purchase of the flat.
Issuing the second set of FAQs for real estate sector, the Central Board of Indirect Taxes and Customs (CBIC) said that builders will not be able to adjust the accumulated credits in ongoing projects in case they opt for lower new GST rate of 5 per cent for normal and 1 per cent for affordable housing.
The first set of FAQs for real estate sector was issued last week to clarify doubts with regard to migration of real estate developers to new GST rates for the sector which has come into force from April 1, 2019.
The GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, had in March allowed real estate players to shift to 5 per cent GST rate for residential units and 1 per cent for affordable housing without the benefit of input tax credit (ITC) from April 1, 2019.
For the ongoing projects, builders have been given the option to either continue in 12 per cent Goods and Services Tax (GST) slab with ITC (8 per cent for affordable housing), or opt for 5 per cent GST rate (1 per cent for affordable housing) without ITC and communicate to their respective jurisdictional officers the same by May 20.
To a query on what shall be the rate of GST applicable on projects in respect of which occupation certificate has been issued prior to April 1, 2019, but the balance demands are pending, the FAQ said: "Time of supply of the service by way of construction of apartments in such projects falls prior to April 1, 2019, and accordingly the rates as existed prior to April 1, 2019, would apply to such balance demands."
AMRG & Associates Partner Rajat Mohan said, "This clarification has tightened the grip on taxpayers who intended to take benefit of lower taxes rates with the aid of deferred invoicing."
On whether accumulated ITC can be adjusted against new tax liability of 5 per cent and 1 per cent, the FAQ said: "No. GST on services of construction of an apartment by a promoter at the rate of 1 per cent/ 5 per cent is to be discharged in cash only. ITC, if any, may be used for discharging any other supply of service."
"Developers opting for new tax regime for ongoing projects now has another reason to refrain from new scheme," Mohan said.
The CBIC further clarified that exempted goods procured by a builder under the new tax regime would not be counted within the 80 per cent limit set for procurement from registered dealers.
"This could entail an additional tax of 18 per cent on value of exempt supplies, credit of which would not be available to developers," Mohan added.
While deciding on lower GST rates for real estate sector, the Council had said that at least 80 per cent of the inputs should be procured from registered dealer.
The CBIC has also clarified that developer and not the land owner will have the right to decide whether to opt for new GST rates or stick to old rates for ongoing projects.
EY Tax Partner Abhishek Jain said: "Clarifications on some technical ambiguities like non-applicability of new rates for projects completed before April, 2019, valuation of TDR, etc should help resolve some involved issues for this sector."
Sources: realty.economictimes.indiatimes.com

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